The Custer Battles case is being watched closely by the contracting community, since many other fraud cases could hinge on the outcome. A backlog of 70 fraud cases is pending against various contractors. Who they are is anyone's guess (one case was recently settled against Halliburton subcontractor EGL for $4 million), since cases filed under the False Claims Act are sealed and prevented from moving forward until the government decides whether or not it will join the case. The means some companies accused of fraud have yet to be publicly identified, which makes it difficult for federal contracting officers to suspend or debar them from any new contracts. The U.S. Air Force moved to suspend Custer Battles from new contracts in September 2004, after the alleged fraud was revealed.
In May, however, the Wall Street Journal reported that attempts were made to bypass the suspension order by two former top Navy officials who had formed a company that purchased the remnants of Custer Battles. Meanwhile, Alan Grayson, the attorney who filed the Custer Battles case, says that because of orders passed by the CPA, Iraqis have no chance of recovering any of the $20 billion in Iraqi money used to pay U.S. contractors. The CPA effectively created a "free fraud zone," Grayson says.
No. 6: General Dynamics
Most of the big defense contractors have done well as a result of the war on terror. The five-year chart for Lockheed Martin, for instance, reveals that the company's stock has doubled in value since 2001.
Yet The Washington Post reported in July that industry analysts agree that of the large defense contractors, the one that has received the most direct benefit from the war in Iraq is General Dynamics. Much of that has to do with the fact that the company has focused its large combat systems business on supplying the Army with everything from bullets to tank shells to Stryker vehicles, which made their debut during the 2003 invasion.
In July, the Post reported that the company's profits have tripled since 9/11. That should make some people happy, including David K Heebner, a former top aide to Army Chief of Staff Eric Shinseki, who was hired by General Dynamics in 1999, a year before the Stryker contract was sealed. According to Defense watchdogs at the Project on Government Oversight (POGO), General Dynamics formally announced it was hiring Heebner on November 20, 1999, just one month after Shinseki announced a new "vision" to transform the Army by moving away from tracked armored vehicles toward wheeled light-armored vehicles, and more than a month prior to Heebner's official retirement date of Dec. 31, 1999.
Less than a year and a half later, Heebner was present for the rollout of the first Stryker in Alabama, where he was recognized by Shinseki for his work in the Army on the Stryker project.
Although the Pentagon's inspector general concluded from a preliminary investigation that Heebner had properly recused himself from any involvement in projects involving his prospective employer once he had been offered the job, critics say the current ethics rules are too weak.
"It's clear that the Army was leaning toward handing a multibillion-dollar contract to General Dynamics at the very time Heebner may have been in negotiations with the company for a high-paying executive position," says Jeffrey St. Clair, author of Grand Theft Pentagon, a sweeping review of war-profiteering during the "war on terror."
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"I suppose I always knew America would eventually break the planet, like some ghastly, hyperactive toddler that gets hold of a mobile phone and then smashes it repeatedly against the edge of a table". Quote from british journalist. |